Yes, right! For the French people, reality is grotesque...
I'll be blunt: too many people are disconnected from reality. Telling how reality is ... well that's impolite, or even seen as a form of violence in France. It's really mind-boggling to see how people just reject reality.
France is a sick country - and a danger for Europe.

What reality are you talking about? You' re confused son. Go to UK pay 10 000 pounds for your university, for which your daughter will probably have to prositute, I ll go to France, work a decent number of hours, get a decent salary and a few kids for which I ll receive money...Indeed, France is the only country in Europe with a decent demographic situation.

"France is the only country in Europe with a decent demographic situation ..."

You shouldn't allow yourself being blinded by statistics. The birthrate of native French women isn't higher than anywhere in Western Europe. The 'decent demographics' result solely from the high birthrate of Muslim immigrants from Maghreb.

"Including grandparents, about 40% of newborns in France between 2006 and 2008 had at least one foreign-born grandparent, predominately from North Africa" (Wikipedia).

Since almost all children born to Muslim families are keeping their Islamic faith, this means that France will be a predominately Muslim country by 2040 with, most likely, a Muslim government … if France is still a 'democracy' by then.

Despite the recent lip-service Hollande served an exasperated Berlin, I have a hard time to believe Paris will see through the tough changes necessary, for several – unpalatable - reasons:

Economic recovery will require structural reform which strike at the heart of the “French Model” and they have to do it without the most effective tool – devaluation in relation to the big nemesis: Germany.

The EU in its current form was constructed to give the appearance of balance of power with Berlin – a delusion further form the truth with every day, as the Germans innovate and France stagnates (France to oppose EU budget cuts for agriculture, where they are the biggest recipients. They seem to be keener to foster agriculture and expelling their entrepreneurs via high speed trains to London than anything else). Whatever will evolve from the current mess, it will not be power balance between the two.

And last not but least – none of the above will go down well with the way the French view themselves – so there is little push towards a realistic vision of the future – thus little incentive to act.

Till the little summer mutiny attempt failed (to collude with Rajoy and Monti to outmanoeuvre Berlin) Paris apparently believed they could maintain the previous status quo – well – it did not work.

And I have even more difficulties to imagine Paris tackling the real elephant in the heart of all of it – the currency union between Germany and France. The Euro needs to go to deal with all the imbalances, which will consequently reveal the “new normal”, i.e. a weaker France. The French will fight it tooth and nail – defying reality as long as – fate will take over.

We are not as far away from the inflection point as many think – the sheer noises of panic (cue – not even the pretence of a solution for Greece) drown out how strained the system has become, how much perversion of justice is necessary, how much perversion of democracy is taking place to maintain the status quo. It will work for a while, possibly longer than I would like, however, you cannot defy gravity for ever. Europe being sacrificed on the altar of French pride – aided and abetted by a hapless and helpless Berlin, unable to navigate the stroppy waters of to mutually repelling forces – on the one side, the need for a more unified system and the will to move on to compete in the globalised world – something the northern core states can and will hopefully achieve, including Scandinavia, possibly including a new currency union. On the other side, the growing imbalances created by inertia and denial of reality.

I agree with your post - but the "the big nemesis" for the French shouldn't be the Germans. Germany is trying to help. The really 'big nemesis' is the 'gone-wild' globalization. France is not only uncompetitive in relation to Germany, but in relation to the rest of the world as well.

To level out these imbalances, France can either devaluate internally or externally (if she returns to a domestic currency). In both cases this won't help on the prices for essential imports: crude, gas and other raw materials. The standard of living will be lowered in France, one way or the other.

Well, I guess, if Berlin would become more sensitive on how her "help" is perceived and communicates (and acts) accordingly, it would be a very big step forward. I - and I guess others - have cringed reading your first/2nd sentence.
Do not get me wrong, I know Angie means well - from the constrains of her set of parameters. Berlin is deluded in thinking going forward, we are all best friends, basically applying the German post WW2 consensus approach to Europe. Wake up - reality is different. The French are in it to subjugate and fleece the Germans for their own benefit. Period. I had a debate with Dommique II a couple of month back, were we agreed to disagree on - Germany needs to pay (which she cannot afford) or hell ensues.
Apparently (and I hope still over experience) that there are some in Berlin you are capable to counter the very elaborate negotiations tactics applied by Paris. I yet have to see evidence, however. Schaeuble is putty to Lagarde, Kauder.... brhhh.... Kampeter...... Westerwelle……
Germany is the "nemesis" for the French, they are the first and most obvious indication threatening their self-perception. Simply due to being larger and more successful. [Berlin is committing kamikaze trying to keep France and her banks afloat, thus denying reality - read Kyle Bass investor letter, yesterday posted on zerohedge "sheep to slaughter" - there is not enough money in the pot to rescue the German savers, get the queen of bafin on it, quick, avoid the banking union at all costs – maybe Weidmann can explain the time bomb of collateral rehypothecation to Angie/Koenig high time they understood]. The French know their issues, [the organised bot attack on this forum the best proof], however internal devaluation is more painful than external see Greece, Spain etc.; however the will do everything, sacrificing Europe to get Berlin to pay for it. They always have got away with it in the past as well. The Euro was exactly it, a project to disguise the different economic path, the disparity of currency value, the Franc devaluing against the D-Mark.
My very personal take - and we had this debate already – the economics require a solution that appears currently unpalatable for political reasons. Whatever Europe should or could look like going forward, parity with Paris is not it. They will never agree to let the Euro go peacefully, and Berlin is not capable of deflecting the blame game properly in case they would leave the Euro first. [which is the only way, however the window of opportunity is almost closed …]
This is NOT about German goodwill or willingness to help – it’s about the insecurity about Germany’s position post post WW2, Berlin ignorance about her limits, about her own Achilles heel’s (German Banks), amongst others. Insofar – Berlin is operating roughly on the same level of delusion then Paris does…..- although being deluded about different things - not too good for all of us.
What I fail to understand is why London and Berlin are not working closer together….

Every one or two years since the 1980's, The Economist publishes a cover story to explain how bad France is doing and to point out its inability to reform itself.
A few decades of "collapse" later, France has a higher GDP per capita than the UK; a similar public debt/GDP ratio (and a much lower one if you take private debt into consideration); French people live longer; France has more companies in the Fortune 500... And the list could go on.
Of course France has its problems and I am not saying it is doing well. But in the light of these simple facts, maybe The Economist should also look backwards and ask itself what went wrong with its predictions... Self-introspection and courage to identify past mistakes are not only for French politicians.

It is because the Economist doesn't look at the underlying production but economic policies only. As bad as the policies are in France they still have a lot of productive industries and technology whereas the UK got rid of most of it and lives from finance and real estate (that don't produce anything). When I go to a department store here in Australia there are lots of products made in France and Germany but nothing made in England.

Wealth comes from science and technology and not paper shuffling. The productive industries in France can pay for the bad policies but the non productive industries in the UK can't pay for the supposedly good policies.

Based on the data, British and French industries seem to be of a similar size actually. But I would agree that The Economist focuses too much on politics. What is called the "economic strategy" of a country is the result of a much more complex and hard-to-predic interraction between political decisions, the structure of businesses, history, social trends, demographics, outside events...

I don't know how reliable those statistics are. When I go shopping I never see anything made in England. The French make a lot of cookware, appliances, planes and cars (though I must say they are not the best quality and neither cheap). What tangible goods does England make?

True, but do not get me wrong: I DO think France is in trouble and would agree with some of the proposed reforms.

But in my opinion, the irony is that The Economist is often in denial of reality too (like the marxists a few decades ago?). Economic data shows no difference in performance in favour of countries that have complied more with its recommendations over the past generation - be it in terms of growth, debt, or well-being. Their performance is not worse either, just rather similar. However, despite the absence of factual proof is is right, The Economist continues to recommend the same recipes, and calls people who disagree ideologues. I think they miss the irony...

And this report is I think a good sign of this. You have two economies (France and Britain) that are about the same size and share similar unbalances (public deficit, public debt, external deficit, aenemic growth...). But, god knows why, one is a time bomb about to explode because of these unbalances, and the other... Well the other should be ok, probably because The Economist's views are better received there.

Do not get me wrong: I am a supporter of free market and not a fan of big government. I would just like to see more pragmatism and a touch of self-criticism in The Economist.

Though you are correct in many points, for an observer from the outside there is still a difference between the two: The British society seems way more flexible than the French. This "French inflexibility", seen also here on these threads, will be the stumbling block for the French society . . . if they don't manage to change quickly.

If Europe keeps ignoring the fact that in order to overcome this crisis more integration it's needed (with policies such as a common fiscal policy, a common EU market for services, more central power, etc...) we're not going to end well.

By now, European politicians are just discussing how to solve the short-term problems (a grexit, public debt not to increase in the next year), but they are surprisingly ignoring that ANYTHING important was done about the functioning of EU, until the beginning of the euro crisis.
It's like a doctor trying to cure a patient bleeding to death by giving him drugs to prevent fever.

I do not believe that the French voluntarily will ever cease sovereignty to a non-French entity. As long as France could call the shots the EU was a "good thing", but in the moment others may have a stronger voice, the EU is as dead as a doornail for most French voters. The 2005 referendum on the European constitution was clear evidence of this.

French power wasn't challenged as long as only 6 co-members formed the european community. But French influence on EU events is essentially watered down in an EU of 27. There won't be "more central power" in the EU if the French can't control this power. This is (for Europe) a sad fact.

France but not Germany is a danger to the Euro? Hostile to Capitalism? No just hostile to financial WMD & slave labor. France produces all those exquisite luxury products beloved of plutocrats everwhere. Germany has some catching up to do if it is to be competive with France in the tourism sector. They should be sending their people to France to learn the secret of their success.

According to UN rankings. France gets 3 times as many inbound tourists as Germany and is the top tourist destination in the world, above the UK. Why doesn't the Economist sing the praises of this industry in France? Probably because Economist journalists haven't bothered to look up from their Figaro & vin rouge. Highly competitive, I would say.

This is a pathetic article written from a newspaper that always tries to devaluate a culture that is at the opposite of the Anglo-Saxon world. The Economist has been demising France for decades, trying to denigrate its culture and the country: but the facts prove something different; more and more investors go to France and the prophecy that the Economist would like to see fulfilled has actually less and less chance to occur. If the Economist wants to write a paper about a country that has 15% of people suffering from fuel poverty, a country where one female student out of four needs to prostitute herself to pay her studies, and a country whose multiculturalism is going to fail beyong anything that has been seen in other countries, they should look at the other side of the channel.

'If the Economist wants to write a paper about a country that has 15% of people suffering from fuel poverty, a country where one female student out of four needs to prostitute herself to pay her studies, and a country whose multiculturalism is going to fail beyong anything that has been seen in other countries, they should look at the other side of the channel.' [Stayawake]

The statistical likelihood of one girl-student in four having the wherewithal, the motivation, or opportunity to exercise the oldest profession profitably is most unlikely, IMHO. This reads like a Gallic fantasy, Stayawake.

My neighbours say - in their respective languages - that your remarks about multiculturalism in Britain are bollocks.

oh please don't talk of the French poverty, up to now we don't use kids labour, like UK and Italy do
did you notice that multiculturalism wasn't a french motto, but a Brits'
oh the french students that use prostitution instead of a few hours work in a Macdo, prefer easy money to their studies, and they ain't a representative image that depicts our female students
but you did pick it cuz, like a Brit, you like stories behind the belt, hey aren't your papers full of croustillant events?

The path of structural reforms is not the only one historically taken. In quite a few instances left-leaning administrations of various countries have nationalized large failing enterprises, thus keeping relatively low unemployment. Such actions may not improve the country's prosperity in the longer run, but keep the population content and left wing politicians in power. Given the popular sentiment in France, I fail to see why its population would prefer painful restructuring to private sector nationalization and a larger role of state in the economy. Coupled with the ability to print money, countries were able to exist for decades that way. France can too, as soon as Germany leaves euro and ECB is based in Paris, or France leaves the euro and FCB is based in Paris.

Welcome back to the 21st century. You might have missed it, but the derivatives bomb went off quite spectacularly in 2008! That's when our glorious leaders decided it was time to share the burden by nationalising the vast losses on these derivatives. You have to love this version of capitalism - private profits; public losses.

2008 was only the tip of the iceberg if you ask me. We need (especially in the US) much tighter regulations in the financial sector. That's not the direction Geithner decided to go. Wait till the "Geithner bubble" bursts...

The Economist claims that the only way for Hollande to save France and the EU is to implement structural reforms fast. Economically, it makes sense. If structural reforms are good – at least according to liberal economists, then why not implement them straight away?

I think that The Economist strongly misunderstands France and French society. Hollande is, as he showed last week when he announced a plan to boost France's competitiveness, committed to bringing about long-awaited change. But one must not forget that France remains a highly divided country: Right and Left have never been able to work together; labour unions and business associations have long accused one another of refusing to reach a compromise. One does not reform a country in one day. Finding the right pace to reform a country is essential, so that the country does not end up further divided and reforms are well understood, accepted and implemented.

Hollande has been in power for 6 months. He has had to deal with major political constraints, coming from his own coalition and the very nature of French society. So far, he has managed to make decisions without creating too much political instability, and without dividing the country. He may not be doing enough, but let us not forget that it took Germany more than 10 years to become more competitive.

The Economist is clearly trying to put forward its own liberal agenda. But the world is not governed by technocrats. In a democratic regime, time and patience are key virtues. Let us see what Hollande has achieved in 5 years' time.

As a side note, I would like to refer to the articles which The Economist published about François Hollande back in April, just before the Presidential election. The Economist argued that Mr Hollande was indeed "very dangerous" and predicted that sovereign interest rates would rise dramatically, throwing France into a dangerous spiral of debt and recession. What has happened so far? Quite the opposite.

Je suis d'accord avec vous! Nothing is new. In fact, I think TE understands the various nuances of people and cultures, as much as the economies and finances of countries in the EURO basket. TE has taken a 'Chicken Little' approach if not a deliberate attack on the various countries involved, one after the other. Don't be surprised by the coming sequel finale on Germany in the near future!

One wonders why, beyond the obvious, this relentless attack for years on on the Euro???

I think most of the people agree that big reforms take time and are not easy to do (mainly in a country like France). However, two major things could easily happen before:
1. The fiscal tightening is preventing companies to find and convince investors (who would invest in such a fiscal horror scenario?). In a quickly competitiveness deteriorating environment, like in France today, letting the time run could just create a lag behind very hard to catch up. The economy could very quickly be permanently damaged.
2. France is borrowing with lower yields (as you mentioned), but this is pretty much a bad sign instead of a good one. When investors start to invest with negative real yields (like in some government bonds, including US bonds) that only means they are very nervous and volatility is in very high (they are seeking for a “return of the capital” instead of a “return on capital”). The guys out there are pretty much in “panic mode” and the same panic that made them run into French bonds could make them run out just overnight.
If you have a patient with a localized cancer, what would you do? Remove the tumor or “donner du temps au temps”?

I fully agree it is very difficult politically to push reform quickly. It is hard in democracies, and it is hard in dictatorships as wells. Human mentalities change slowly.
What I do think the article does warn is that: one must be beware of the amount of patience others has. How much patience voters have? How much patience does the folks inside ECB, Wall Street, and the City has? French voters' patiences are more manageable. I do not know how much patience do the folks in finance have when they smell problems - all it takes is a bad bond auction or rumour that trigger a French debt sell off.
I do hope France the best. I think Hollande will do best to try as hard as possible show others that he is trying, and things are moving - may be slowly. In the end, showman game is big in politics. The showmanship buys time and patience.

It did not take 10 years for Germany to become more competitive than France - french leaders are puzzled about german comptitiveness for more than 5 years now, I still remember Ms. Largarde complaining that Germany 'does not consum/import enough' even before the financial crisis hit.

What a surprise! A French bashing in a British newspaper. Sure, it will a very profitable issue. Write what you want but the facts are facts. The French budget is in deficit not since 1981 but since 1974. The external current account was in surplus until 2004 and none in 1999. The creation of small business is one of the most buoyant in Europe. The problem is for the mid size companies. The work market is so rigid than now more of 25% of salaries work now with temporary contract. You forget also the french workforce is one of most productive in the world and so on and so on... just question of habits...

This Economist cover would have been understandable a month or even two weeks ago, when everybody thought the government would shelve the Gallois report.

But the magazine is making a fool of himself by publishing it now, and I suspect that they had prepared the "14-page special report" well in advance, were taken by surprise by Hollande's announcement on the 20bln eur tax break (see their web stories), but were not prepared to "let the facts get in the way of a good story", as the saying goes and change the tone of their report.

And on the day France actually defies doomsters by NOT falling in a recession and posting 0.2 pct growth in the third quarter, this provocation looks even more out of touch with reality.

All in all, it's a way of deflecting attention from Britain's own problems, a country whose budget deficit is actually getting worse and on course to be twice as big as France's next year.

realy, after reading the whole article, you take it too easy, and, as our franch journalist, you use some arguments that are not realy the main actual subject, as the 75%, this is a ''smoke scree'' as we say, that mean this is to hide else.
Too, you don't really prove what you told. You could, at least, prove by number the fact that France doesn't build up new companies, and secondly, about the 2005 reform, Holland was may burned, but the reform was tooken by an other way, they did a ne reform, without referendum, with a different name than traité de Lisbonne, but content is kind of the same...
May France is going to be in a bad situation even already is, but USA, South Belgium, UK, Italy, and so one, are too.
Secondly, everytime newspaper use Norway Sweden, and so on as exemple, we never they put further the fact they are between 5millions for Sweden for example, or 10-12 for Norway, with a country bigger than France, AND with Gas, Petrol.
We do not make comparison between a chcickn raise into a wild condition and a chicken bettery farming on the same scale, each don't have the same raw/conditions, here is the same...

I understand, i would just say that it's not as easy as it sounds here, first, and secondly, France and USA have similary problem (jobless, real estate rate, relation between population judgment in front of tax rate and richs taxation, etc)
Otherwise, the title is not totally throw, we are , i guess, close to the blowing-up...
(Sorry for the mistakes, english is far to be my mother tongue ^^)

Most US commentators, economists etc. that I know are well aware of their own dilemna, and despair of their politicians inability to address the issue (to date).
However, the fact that someone else is mismanaging their economy, whatever county/region that may be, does not make mismanaging ones own economy any better. The time will come in all those places where the price will need to be paid, and the essence of the article is that in France it's drawing near.

Even you had some republican gov, or liberal economics, it's not because of our socialist system (sure it's not an help) but the reason is mre about the PPP and the fact that economy fall to a third economy, buy in China, and spend money pegged on debt.

And any government could it be, Right or Left, they rarely took ''big'' decisions since longtime, one of the biggest could be the 35h/week in 1998, while France used to be under the non-socialist power, so, put the fault on actual socialism is wrong. Put the fault on Sarkozy is wrong too. The actual situation is the result of an amount of previous bad measures and people beaviour.

There is no appetite for reform in France. That is why young and talented French people are much more likely to be found in London, New York, Hong Kong and Singapore than Paris... I see a bleak future for a country that cannot keep its best and brightest youngsters within its borders.

I would agree that the French invididuals that I have had the pleasure to work with have been impressive for the most part. However, given that the US spends more on education (per student and percentage of gdp), I am not sure if the relationship is as strong as you make it out to be. I have yet to be impressed by average graduate of the US educational system (we do make some great outliers).

I disagree. When the French go to work in other countries they are inventive, hardworking and are not afraid to say they like money. In other words they adapt once they get out of France. The problem is the French in France where there is this pseudo revolutionary "pensée unique" atavistic mentality that dictates that some subjects are out of bounds and a constant state of denial not to mention that more taxation is the only way to show solidarity. The French in France are obsessed with this so called notion of solidarity (nipple sucking off the state). No diverging opinions need apply.

"I see a bleak future for a country that cannot keep its best and brightest youngsters within its borders."

Well you really don't want to be in New Zealand at the moment! Since John KEY, Cameron's 'intellectual' twin, has been in power we are seeing an exodus of our youths to Australia - unemployment is steadily increasing and so is the gap between high and low incomes, tax-cut for high incomes and benefit cut for the unemployed, people on any type of benefit are unrelentingly shamed and portrayed as lazy and stupid. Now, that's liberal economics at work!

Hate to interrupt the levity of this thread, but I would like your opinion on this -

Is there a level of concentration of the population of expat-French in a foreign place such that when it is attained the society begins to assume/reflect the same attitudes that prevail back in France?